08/06/12 -- Soybeans: Jul 12 Soybeans closed at USD14.26 1/4, down 1 3/4 cents; Nov 12 Soybeans closed at USD13.32 1/2, down 8 3/4 cents; Jul 12 Soybean Meal closed at USD429.80, up USD4.30; Jul 12 Soybean Oil closed at 49.46, down 93 points. For the week Jul 12 beans were up 82 cents and with new crop Nov 12 gaining 74 1/2 cents. Meal advanced USD35.50 and oil a more modest 87 points. Funds were said to have been net sellers of around 4,000 soybean contracts on the day in what can probably be attributed to profit-taking at the end of a week where beans put on some pretty decent gains. The USDA announced the sale of 410,000 MT of mostly new crop beans to China along with 120,000 MT of old crop to Egypt, indicating that robust demand for US soybeans is still out there. US weather continues to be far less than ideal too. The main bearish factor out there is the European debt crisis, with strong rumours that the Spanish will bite the bullet and request a bailout over the weekend. . For soybeans it seems like the US is pretty much the only shop in town. Argentina's crop has slid from an anticipated 52 MMT in December to around 40 MMT now, whilst Brazil's has shrunk from 75 MMT to around 66 MMT. The latter is widely considered to be virtually "sold out" and in the former producer selling is light, dogged by the usual strike action and arguments with the government over taxes.

Corn: Jul 12 Corn closed at USD5.98, up 4 cents; Dec 12 Corn closed at USD5.44, up 7 1/2 cents. On the week as a whole Jul 12 was up 46 1/2 cents and Dec 12 rose 34 cents. Funds were said to have been a buyer of around 4,000 corn contracts on the day. Weekend weather forecasts aren't great, offering on a limited chance of rainfall for much of the Midwest. Looking towards the second half of June things are also turning hot and dry. Respected and widely-followed analyst Lanworth, which uses satellite imagery to forecast crop production in the US, came out with a forecast for US corn output this year of just 13.65 billion bushels (346.7 MMT), which is well below the current USDA estimate of 14.79 billion bushels (375.7 MMT) - 29 MMT below to be specific. Monday's price direction will likely depend on what happens with Spain over the weekend, and how that impacts on the dollar, and money flows into or out of the grains. The market will also be looking to the revised weekend weather models and have an eye on Tuesday's upcoming supply & demand and stocks report from the USDA. Trade estimates for corn are that old crop US ending stocks will be trimmed 30 million bushels to 821 million, and with new crop carryout cut 131 million to 1.75 billion bushels.

Wheat: Jul 12 CBOT Wheat closed at USD6.30 1/4, down 11 1/2 cents; Jul 12 KCBT Wheat closed at USD6.56, down 12 1/2 cents; Jul 12 MGEX Wheat closed at USD7.69 1/4, up 2 1/2 cents. For the week Chicago wheat was 18 cents higher, with Kansas up 19 cents and Minneapolis climbing 29 3/4 cents. The overall picture for wheat is less bullish than it is for corn or soybeans. For one, there's much more competition around when it comes to making sales on the global market. A possible period of further dollar appreciation, should we get one on the back of an escalation of the European debt crisis, won't help US export prospects. In addition, the US is in the middle of the winter wheat harvest (and the spring wheat crop is looking great with 78% of the crop rated good/excellent as of last Sunday). Hence, wheat stocks are plentiful, unlike they are for corn and soybeans where the harvest is still a few months away yet and where yield prospects are still highly uncertain. Next week's USDA report will give us revised estimates for 2012 US wheat production, with the trade expecting an all wheat crop of around 2.2 billion bushels (59.9 MMT) versus 2.0 billion (54.4 MMT) last year. US old crop ending stocks are expected to fall slightly, down 13 million bushels from last month to 753 million bushels.

08/06/12 -- EU grains closed narrowly mixed Friday, with Jul 12 London wheat down GBP0.50/tonne to GBP171.50/tonne and Nov 12 GBP0.25/tonne firmer at GBP157.00/tonne. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 decided to also join the unchanged club closing at EUR209.50/tonne.

For the week as a whole Jul 12 London wheat up GBP0.50/tonne and Nov 12 GBP2.25/tonne. Aug 12 Paris wheat was unchanged and Nov 12 was EUR0.75/tonne higher.

It's been a lacklustre week here in the UK with the markets closed Monday and Tuesday, with trading in Paris also relatively subdued, whilst it's been another choppy week over in the US.

FranceAgriMer say that taking winter losses into account the soft wheat harvested area there is expected to have dropped 5.4% to 4.72 million hectares this summer. French barley plantings have climbed 16% this year to 1.79 million hectares from 1.55 million hectares in 2011 and the spring corn harvested area is seen rising 6.1% to 1.64 million hectares.

May rains have continued into June, with French soft wheat crop ratings steadily improving, France AgriMer now rate 72% of the crop as being in good/excellent condition - up 7 percentage points in the past four weeks.

Following a string of varied, and mostly fairly bullish, forecasts on Russian grain production potential this week, SovEcon today came out with a plausible 87 MMT harvest total, of which 53 MMT will be wheat. That's a cut of 7.6% on total grain output, and a reduction of 5.7% for wheat.

Russia's export potential will decline much more steeply however. In the case of total grains to 18 MMT, a third less than in the current marketing year, with wheat accounting for 14 MMT of that (down 30%), they said.

The Ukrainian Agrarian Business Club estimate Ukraine’s 2012/13 grain output at 46-47 MMT, down around 18% on last season's 56.7 MMT.

Meanwhile the European crisis rumbles on. Fitch downgraded Spain’s credit rating by 3 notches yesterday and the word on the streets tonight is that the Spanish government will make a formal request for EU aid for its stricken banking sector over the weekend whilst the markets are closed. Estimates as to how much they may need are anywhere between EUR30-100 billion.

08/06/12 -- Yesterday's hoped for potential QEIII package failed to live up to the hype, with Federal Reserve Chairman Ben Bernanke speaking to Congress about the outlook for the US economy giving no indication that further monetary easing was on the cards.

That follows the ECB's failure to cut interest rates and/or announce some form of further stimulus measures of it's own earlier in the week. So all the market has to cling to this week is a quarter percent interest rate cut from China.

That clearly isn't enough for the market. NYMEX crude is down more than USD2/barrel this morning, with the overnight grains seeing soybeans around 20 cents lower, wheat down 10 cents and corn falling 6-8 cents.

The dollar is higher on the Bernanke news, adding further pressure to the grains sector this morning. Meanwhile we have the not insignificant matter of the Greek elections now little more than a week away.

Meanwhile Fitch have slashed three notches off Spain's credit rating and signalled it could make further cuts as European debt woes resurface once again.

The promised rain for Western Australia has started to arrive with 5-25mm falling in the past 24 hours and a further 15-25mm on the cards Sunday/Monday. Even so a Reuters survey yesterday pegged 2012/13 wheat production at only 25 MMT, 1 MMT lower than the official government and USDA estimates.

The Suffolk Show today has been cancelled I gather from Twitter. UK farmers will really be cursing this heavy rain that's falling (and now wind too) that they'd have given their eye teeth for a few months ago, but there could be a return to warmer, drier and more settled weather 10 days or so from now according to my weather sources. France and Germany have picked up plenty of moisture in the last 24 hours too, which ultimately should prove beneficial.

Brussels issued 135 TMT of soft wheat export licences this past week, bringing the marketing year to date total to 12.2 MMT, 31.5% down on last year's 17.8 MMT. Given the consistent weakness of the euro that's a pretty poor performance.

07/06/12 -- Soybeans: Jul 12 Soybeans closed at USD14.28, up 41 3/4 cents; Nov 12 Soybeans closed at USD13.41 1/4, up 42 cents; Jul 12 Soybean Meal closed at USD425.50, up USD10.90; Jul 12 Soybean Oil closed at 50.39, up 114 points. Funds bought an estimated 6,000 soybean contracts on the day, enthused by the news that China had dropped interest rates for the first time since 2008. Outside markets and US weather concerns also provided support. Weekly export sales at a combined 495 TMT versus expectations of 600-850 TMT tempered a little of today's enthusiasm. China sold less than 14,000 MT of the 600,000 MT of soybeans on offer in today's auction. That would seem to indicate that the quality of whatever state-owned stocks they do have is questionable. CNGOIC estimated China’s May and June soybean imports at above 12 MMT, with imports during Jul–Sep at 13.5 MMT. Tuesday's upcoming USDA report is expected to see 2011/12 US soybean ending stocks fall from 210 million bushels to around 190 million. Carryout for 2012/13 is also seen being reduced. Dryness in the US is seen thwarting some farmers plans to double crop wheat with soybeans.

Corn: Jul 12 Corn closed at USD5.94, up 7 3/4 cents; Dec 12 Corn closed at USD5.36 1/2, up 17 cents. Funds were said to have been net byers of 14,000 corn contracts on the day. The news of a cut in Chinese interest rates also lent support to corn. The USDA attaché in China estimated their 2011/12 corn imports at 5.5 MMT, unchanged from the previous estimate, with 2012/13 corn imports rising to 7.0 MMT. How much of that will come from the US remains to be seen with recent analysts estimates for Brazilian corn production this year rising on the back of bumper winter corn output. Whilst US weather forecasts are turning cooler, much of the promised rain is also being taken away. Nevertheless the USDA's chief economist Joseph Glauber stuck by his forecast for record production, a substantial rebuilding of ending stocks and "significantly" lower corn prices in 2012/13. Corn export sales were a bit lower than the 450-750 TMT expected at a combined 399 TMT. China was in there, but only taking 18,600 MT of the old crop and cancelling 15,000 MT of the new crop.

Wheat: Jul 12 CBOT Wheat closed at USD6.41 3/4, up 17 1/2 cents; Jul 12 KCBT Wheat closed at USD6.68 1/2, up 13 1/2 cents; Jul 12 MGEX Wheat closed at USD7.66 3/4, up 22 3/4 cents. Funds were said to have been net buyers of around 3,000 Chicago wheat contracts on the day. Short-covering on spillover support from the other pits was a feature with firmer outside markets and a weaker dollar also helping. Weekly export sales of just 165,700 MMT for the first week of the 2012/13 marketing campaign was well below expectations of 400-500 TMT. A total of 1.3 MMT in sales were carried over from the 2011/2012 marketing year. Next week's USDA WASDE report is seen reducing the size of the US winter wheat crop by around 50 million bushels and also trimming 2012/13 ending stocks by around 15 million. The Russian Ag Ministry said that drought concerns have passed and maintained their 2012/13 grain crop forecast at 92-94 MMT and estimated exports at 22-23 MMT. Most observers think that these numbers are overstated by around 4 MMT.

There was a thin air of optimism about that the US and EU would come up with some form of new stimulus package, boosted by the news that China had cut interest rates for the first time since the 2008/09 collapse in global markets.

The FAO raised its forecast for world grain production in 2012/13 to 2.42 billion tonnes from 2.37 billion, and increased ending stocks to 548 MMT from 524 MMT. The global wheat crop was raised 5 MMT to 680 MMT, although world wheat ending stocks were cut from 183 MMT to 181 MMT - 7 MMT lower than the USDA currently project.

The USDA will issue revised world supply & demand estimates on Tuesday next week.

Also next week we have ABARES crop report due on Wednesday. "In the coming week up to 25 mm of rain is forecast for cropping areas of Western Australia. The rain should provide much needed moisture for the germination of recently sown winter crops," they said yesterday.

The Greek elections, now little over a week away, also have the potential to be a game-changer. Greek 10-year bonds are currently trading with a yield of around 28%.

Speaking at the IGC conference in London the USDA's chief economist Joseph Glauber said that record US corn production this year should help ease market volatility and see prices fall significantly in 2012/13 as stocks rebound and demand from the ethanol sector remains flat.

The Russian Ministry forecast this season's grain crop at 92-94 MMT from 94.2 MMT last year and see 2012/13 exports at 22-23 MMT versus 27 MMT in 2011/12.

07/06/12 -- The electronic grains are higher, led by soybeans, with front month Jul 12 20 cents firmer and now back up above the USD14/bu mark - it hasn't closed above that level in the last eleven sessions.

Corn is around 5-7 cents higher in sympathy, with wheat getting dragged reluctantly 2-4 cents firmer. NYMEX crude is up more than a dollar, with a bit of "risk-on" in the air.

That could all change at the drop of a hat, with the Greek elections now only ten days away.

Before that we have the USDA's June WASDE report next Tuesday, with the trade expecting a reduction in corn and soybean output for Argentina, although we may get a rise in corn, or even both, for Brazil.

The trade is also expecting a further tightening in 2011/12 and 2012/13 US soybean ending stocks.

Today's USDA weekly export sales report was pretty uninspiring, giving us wheat export sales of just 165,700 MMT for the first week of the 2012/13 marketing campaign versus expectations of 400-500 TMT. A total of 1.3 MMT in sales were carried over from the 2011/2012 marketing year.

Corn sales were a bit lower than the 450-750 TMT expected at a combined 399 TMT. China was in there, but only taking 18,600 MT of the old crop and cancelling 15,000 MT of the new crop.

Soybean sales were also disappointing at a combined 495 TMT versus expectations of 600-850 TMT.

Speaking at the IGC conference in London the USDA's chief economist Joseph Glauber said that record US corn production this year would see prices fall significantly as stocks rebound and demand from the ethanol sector remains flat.

Assorted reports out of Russia suggest that their 2012/13 grain crop could be anywhere from 84-94 MMT. Some still talk of dryness being a cause for concern, yet others now suggest that too much rain is taking the sine off quality! Exports in 2012/13 are likely to be in the region of 22-23 MMT versus 27 MMT this season, according to most.

There seems to be whiff of optimism about that there may be some more QE in the wind from the US and EU. Fed Chairman Ben Bernanke is speaking to Congress about the outlook for the US economy around now.

China has surprised, but pleased, the market with its first interest rate cut since 2008.

The story concerns the development of Vireol, which apparently should have the finance it needs in place to press on with the project by October. After that some basic site preparation can begin, they say.

Reading that I thought to myself, I really am going senile because I could swear that I'd ready ages ago that finance was already in place and that construction had already started. I'm not far off, a quick Google reveals a report on Future Capital Partners (the people behind the project) own website dated March 2010 that they were then "in the final stages of completing the financing" and that they were "set to break ground" in July 2010.

Commissioning is expected to start around harvest 2014 before production is really cranked up in spring 2015, if everything goes to plan this time, they say.

If you're a livestock farmer who still expects to be in the industry in 2015, don't panic. Without going into any specifics, the UK is more than capable of producing 20 MMT of wheat (don't grow any barley, just plant wheat maybe?) so there'll still be plenty to go round, feed all the bioethanol plants and still export the usual 2-3 MMT, we are assured.

Phew, that's a relief. It's a win-win all round situation. With all the extra DDGS on the market, and all this surplus wheat that we'll have sloshing around, the bioethanol industry is actually the livestock farmers friend. For one minute there I was completely getting the wrong end of the stick.

"What's for tea tonight, Mum? Argh, not DDGS and chips again, we had that last night and the night before. No, I haven't seen the price of mince. Come to think of it I haven't seen any mince since Christmas Day. Oh for mince with all the trimmings, bliss...."

07/06/12 -- The electronic market sees beans 4-5 cents higher, corn narrowly mixed and wheat 2-3 cents weaker at 9am. The pound is a tad weaker against both the euro and the US dollar. There's plenty of talk, but so far little action, on further QE measures from Europe and the US. Exactly why the market should think that when QEI and QEII both sank, we should launch QEIII and that will make all the difference is unclear.

China sold less than 14,000 MT of the 600,000 MT of crappy old soybeans that it put up for auction this week. No surprises there, these things were older than Lenny Henry's act - although probably considerably funnier.

"In the coming week up to 25 mm of rain is forecast for cropping areas of Western Australia. The rain should provide much needed moisture for the germination of recently sown winter crops," say ABARES.

A report on Bloomberg today quotes the CEO of Russia's RZ Agro Holding Ltd as saying that the south of the country doesn't need an more rain (!!), as that could harm quality at the current stage of the wheat crop's development. They are forecasting a Russian wheat crop of 54 MMT, in line with yesterday's estimate from the USDA's Moscow attaché, 2.2 MMT down on last year's output.

The Ukraine Ministry say that the spring grain planted area is up 17% on last year due to the replanting of winter losses. The total grain planted area is unchanged on last year at 15.9 million hectares. If Mother Nature assists then they could easily beat last season's record corn crop of 22.8 MMT (the current USDA estimate is 24 MMT but 25-26 MMT could be on the cards if the weather plays ball methinks).

The CME's new Black Sea wheat contract began trading yesterday, closing up USD9.50/tonne with three lots traded all day. Slowly, slowly, catchy monkey. That's what me Nan used to say. Although to my knowledge she never caught a monkey all her life. Many a mickle makes a muckle, that was another piece of useful advice that I quickly found invaluable growing up on the streets of Toxteth. It was awash with monkeys and mickles round there in them days, not like now. You could go out and leave your back door open all day long too then. Of course all your stuff would have been nicked by the time you got home, but we were happy and you could soon replace it with the help of a couple of monkeys. "How much for that three piece suite mate, ours has just been nicked?" "A monkey, squire." "A monkey, you're havin a laugh, I'll give you two muckles and half a mickle, top whack, and I'm doing myself at that." "Oh, go on then." "Right, come on you two monkeys, to me, to you....this looks just like our old one doesn't it...."

06/06/12 -- Soybeans: Jul 12 Soybeans closed at USD13.86 1/4, up 36 3/4 cents; Nov 12 Soybeans closed at USD12.99 1/4, up 22 1/4 cents; Jul 12 Soybean Meal closed at USD414.60, up USD14.60; Jul 12 Soybean Oil closed at 49.25, up 75 points. Funds bought an estimated 8,000 soybean contracts on the day. Reports from Celeres that this season, and even next season's Brazilian soybean crops are well sold along with a report that record Jan/May shipments indicate that this season's sales have been heavily slated in favour of the nearby months. The suggestion is that Brazil will have done most of it's exporting by the end of July and that availability will dry up to a trickle after that. Meanwhile, the Argentine crop is ever reducing - Informa cut their soybean crop estimate to 40 MMT today - 2.5 MMT less than the USDA said last month. That puts a lot of emphasis on the US crop to see the world through until 2013. Just to reiterate the point the USDA today reported the sale of 120,000 MT of old crop beans to China. Once we do get to 2013 though things could look very different. Informa estimate Brazilian production at a record 80 MMT next year, with Argentina also contributing a record 60 MMT. Both predictions are based on current prices encouraging increased plantings along with a return to normal yields/weather patterns. Estimates for tomorrow's weekly export sales for soybeans are 600-850 TMT.

Corn: Jul 12 Corn closed at USD5.86 1/4, up 18 3/4 cents; Dec 12 Corn closed at USD5.19 1/2, up 11 3/4 cents. Funds were said to have been net buyers of around 12,000 corn contracts on the day. Spillover support from beans was a feature as too were hopes of more QE to come from the US and Europe. Informa pegged the Argentine corn crop at 20 MMT, down 1.5 MMT from last month, but raised Brazil's corn crop estimate to a record 67.5 MMT, up 1.5 MMT from last month. Chinese corn production was cut 3.5 MMT from last month's estimate to 195 MMT. The US weather is still throwing up less than ideal conditions with the Midwest drier than average but at least with more moderate temperatures. There's some suggestion of frost potential in southern Brazil over the next few days too, although the suggestion is that that would be more likely to harm quality rather than quantity at this stage of the corn crop's development. Trade estimates for tomorrow's weekly export sales report for corn are 450-750 TMT. It will be interesting to see if China shows up given the recent rumours of sales of 300,000 MT of US corn to them. Brazilian corn is still said to be around USD20-30/tonne cheaper than US corn on an FOB basis.

Wheat: Jul 12 CBOT Wheat closed at USD6.24 1/4, up 11 cents; Jul 12 KCBT Wheat closed at USD6.55, up 17 cents; Jul 12 MGEX Wheat closed at USD7.44, up 15 1/4 cents. Funds were said to have been net buyers of around 2,000 Chicago wheat contracts on the day. The The USDA attaché in Moscow estimated the Russian grain crop at 88 MMT versus 94 MMT in 2011. Their wheat crop was put at 54 MMT, 2 MMT below the current official USDA number and 2.2 MMT below last year's output. The 2012/13 world wheat crop was estimated at 678.4 MMT by Informa, a tad higher than the USDA's 677.6 MMT. They placed EU-27 wheat output at 131.65 MMT, down 800 TMT from the previous month and slightly lower thna the USDA's 132.0 MMT. Aussie wheat production was placed at 25.5 MMT, down 500 TMT from last month and also 500 TMT lower than the USDA recently forecast. Informa also raised their US winter wheat production estimate to 1.676 billion bushels (45.6 MMT), although that is still slightly below the USDA's May forecast. Trade estimates for tomorrow's weekly export sales report for wheat are 400-500 TMT.

06/06/12 -- EU grains finished higher with Jul 12 London wheat ending up GBP0.50/tonne to GBP171.50/tonne, and new crop Nov 12 climbing GBP0.25/tonne to close at GBP155.00/tonne. Aug 12 Paris wheat was unchanged at EUR208.00/tonne, whilst Nov 12 was EUR1.00/tonne firmer at EUR206.50/tonne.

It was a day of mixed influences, but none of them particularly dramatic, in a kind of "is the glass half full, or half empty" sort of a day.

The USDA attaché in Russia estimated that grain production there this season would amount to 88 MMT this year down 6% from last year's 94 MMT. Wheat production will come in at 54 MMT, 2 MMT lower than the official number from Washington last month, although higher than some other estimates in the market, they said.

Exports will however be harder hit, with total grain exports of 19 MMT representing a fall of 30% on this season's 27.1 MMT. Wheat shipments declining by 24% to 16 MMT, they estimate.

Many farmers complained that there was practically no spring this year, as cold winter weather suddenly switched to summer heat and dryness, they commented.

"This sudden onset of very hot temperatures resulted in snow quickly melting and evaporating rather than soaking into the soil to improve moisture levels. In addition, this weather has sped up the development of winter wheat, with heading occurring 2 weeks early in many parts.

"In some areas there was no rain from the first week of April through mid to late May and this significantly impacted the growth of winter wheat. Although rains began to fall at the end of May and this will help in filling of grain, the yield potential is expected to already have been significantly damaged by the previous dryness. These May rains, however, are expected to be beneficial for sown spring crops, including corn and sunflowerseeds," they concluded.

At home, the HGCA said that "the total area planted to cereals and oilseed rape by 1 December 2011 in England and Wales is estimated 5% higher than in December 2010 at 2.984M ha. The England and Wales wheat area planted by 1 December 2011 is estimated 3% higher than the previous December at 1.862M ha."

Private US analytical firm Informa Economics raised their US winter wheat crop production forecast to 1.676 billion bushels, up 1.2% from their May forecast. Wheat development has been notably much faster than normal during May, with crop conditions significantly better than the five year average, they observed.

06/06/12 -- Conab yesterday raised their Brazilian corn crop estimate to 67.8 MMT, versus 65.9 MMT in May and 65.14 MMT in April. That's thanks to an anticipated bumper winter corn crop, harvesting of which will begin within weeks, which will now account for almost half of this year's total production.

Conab cut their 2011/12 soybean production estimate by 0.3 MMT to 63.4 MMT, meaning that this will be the first time in over a decade that Brazil will harvest more corn than soybeans this season.

So what are they planning on doing with all that corn? Export it of course. Corn exports this year are pegged at a record 11 MMT, but could easily be higher given that 2011/12 ending stocks are estimated at an" unprecedented" 16 MMT.

With Brazilian FOB prices said to be around USD20-30/tonne cheaper than those on the US Gulf, port listings show that there's 820 TMT of corn lining up to be exported out of Brazilian ports this week. A year ago that total was only 294 TMT.

06/06/12 -- After an extra two days off, and a trip to see an excellent Elton John in Harrogate last night, getting back into the groove this morning is proving to be something of a challenge. The electronic grains are all green, although it should be noted that corn, wheat and soybean oil have all set, or come very close to, fresh historic lows over the past few sessions.

New crop Dec corn has been hovering only just above the USD5/bu mark, a level it has not breached since late 2010. Jul 12 CBOT wheat, which rallied 16.5% in the week ended 18th May has subsequently given up most of those gains to only stand 2.7% above the lifetime contract low as of last night's close. Meanwhile soyoil closed within 9 cents of setting a new 19-month closing low for a front month on Monday.

In the outside markets, front month Jul 12 NYMEX crude which fell nearly 22% between 1st May and 1st June, currently has recovered a little from its lowest levels since last October to currently stand at around USD85.50/barrel.

The USDA's Moscow attaché says that Russia's wheat harvest this year will total 54 MMT, 2 MMT lower than the official number from Washington last month, although higher than some other estimates kicking around. That would represent a 4% drop on last season's output, hardly a crisis in itself. Of note though is the forecast of total grain exports of 19 MMT of which wheat will account for 16 MMT.

Total Russia grain exports in 2011/12 are expected to be 27.1 MMT, so they are seen falling 30% next season, with wheat shipments declining by 24%. Total Russian grain production in 2012 is estimated at 88 MMT down from 94 MMT last year, a 6% reduction.

Brazilian farmers are already 28% sold on next year's soybean crop even though it doesn't get planted for another four months, according to Celeres. This season's crop is 87% sold, 19 points ahead of the five year average, they add. The firm US dollar and weak real make forward prices more attractive than ever, it seems. No wonder then that plantings are seen increasing sharply for the 2012/13 marketing year, with Informa Economics, Oil World and the USDA all recently forecast that Brazil’s 2012/13 soybean harvest will come in around the 78 MMT mark, some 20% up on this season.

There's a long way to go to that crop though, and pretty much only the US to keep us all going until then.

The ECB have just announced that they've left interest rates on hold at 1%, contrary to a cut of up to 0.5% called for by some. The euro is down on the news.

There's some talk of the Indian government introducing export subsidies to get rid of it's mountain of surplus wheat stocks that has it's antiquated storage system overflowing with state-owned grain. Doing so will cost them a packet, but they may view it that they are better off cutting their losses now whilst these stocks are still of a merchantable quality and make some space with a huge summer rice crop on the way in October.

05/06/12 -- Soybeans: Jul 12 Soybeans closed at USD13.49 1/2, up 9 1/2 cents; Nov 12 Soybeans closed at USD12.77, up 8 3/4 cents; Jul 12 Soybean Meal closed at USD400.00, up USD3.90; Jul 12 Soybean Oil closed at 48.50, up 19 points. Funds were said to have bought around 4,000 soybean contracts on the day. "Weather conditions in the Midwest grain belt continue unfavourable for crop development with a dry forecast this week. Though temperatures have moderated somewhat, dry soil conditions prevail. Field moisture has steadily deteriorated with low rainfall in the past month," say Martell Crop Projections. With South America already well sold on it's 2011/12 crop the world is now largely reliant on this year's US soybean crop to see it through until 2013 and can ill afford any weather-related production set-backs.

Corn: Jul 12 Corn closed at USD5.67 1/2, down 1/2 cent; Dec 12 Corn closed at $5.07 3/4, down 16 cents. Dec 12 closed at the low of the day and now stands perilously close to trading under USD5.00/bushel, a level unseen since December 2010. Funds were estimated to have been net sellers of around 7,000 contracts on the day, possibly shorting corn and buying beans. Monday's crop condition report showed corn good/excellent ratings holding steady at 72% whereas the trade seemed to be expecting a reduction to 70%. The 6 to 10 forecast offers the chance of above normal rains for many, although recent such forecasts have generally disappointed. Conab raised their Brazil’s corn crop estimate to 67.8 MMT, thanks to a winter corn crop of 32.9 MMT, up 2.7 MMT from last month. Brazil's corn exports are seen rising on the back of this. FOB prices there offer significant discounts to US corn at the moment.

Wheat: Jul 12 CBOT Wheat closed at USD6.13 1/4, down 14 1/2 cents; Jul 12 KCBT Wheat closed at USD6.38, down 17 cents; Jul 12 MGEX Wheat closed at USD7.28 3/4, down 13 3/4 cents. Funds were said to have sold around 3,000 Chicago wheat contracts on the day. The US winter wheat harvest is well ahead of normal at 20% complete. Recent rains in Russia and Ukraine are hoped to have drawn a line under deteriorating crop prospects there, whilst there's rain in the forecast this week for parched Western Australia. The UK, France, Germany and Poland have also had some beneficial moisture in recent days boosting yield prospects in Europe. Dec 12 CBOT wheat closed at a USD1.50/bu premium to Dec 12 corn, that is going to see those that had been favouring wheat over corn in feed rations switching back to corn.

05/06/12 -- Paris grains finished mixed with London closed for a second day for the Queen's Jubilee celebrations. Nov 12 Paris wheat was down EUR1.00/tonne to EUR205.50/tonne, it's lowest close in thirteen sessions.

Decent weekend rains across the UK, France and western half of Germany have extended into the beginning of the week, boosting crop prospects further.

Some rain also fell in parched Western Australia, with more in the forecast for the week ahead. Recent rains may also have drawn a line under deteriorating crop conditions in Russia and Ukraine it is hoped.

Tomorrow all eyes will be on Europe, once again, with some pundits forecasting a drop in interest rates from the ECB. Others are calling for an increase in QE to attempt to boost growth.

At home survey by Lloyds Banking Group shows business confidence slumping from a positive reading of 26 points to a negative one of 21 points.

London wheat will play catch up tomorrow after an extended holiday. Paris wheat has been down on both of the last two days, and Chicago wheat is more than 30c lower based on its close on Friday night through to Tuesday night so a downwards opening seems the most likely.

04/06/12 -- Soybeans: Jul 12 Soybeans closed at USD13.40, down 4 1/4 cents; Nov 12 Soybeans closed at USD12.68 1/4, up 10 1/4 cents; Jul 12 Soybean Meal closed at USD396.10, up USD1.60; Jul 12 Soybean Oil closed at 48.31, down 28 points. Jul 12 soybean oil closed within 9 cents of setting a new 19-month closing low for a front month. Cruse oil was lower again for much of the day, but managed to claw its way into positive territory by the end of the session on light consolidation following a near 22% drop in a month. The USDA announced the sale of 165,000 MT of new crop soybeans to China, which was supportive. So too were ideas that despite the early planting, this season's crop hasn't got off to a great start with large parts of the Midwest too warm and dry in May. The USDA released their first soybean crop ratings of the new season. The trade was expecting around 70% good/excellent, but got only 65% in the top two categories. Planting is 94% complete versus 75% normally and emergence is 79% compared with 50% normally. The weather outlook is cooler, but lacking in precipitation. "The temperature forecast this week is favourable, not calling for extreme heat. On the other hand, dry air and low humidity is expected to dominate the grain belt with high pressure in control. This would enhance evaporation, without enough rainfall to compensate. The 5-day rainfall outlook shows a big hole over the Midwest Corn Belt where less than .25 inch of rainfall is anticipated," say Martell Crop Projections.

Corn: Jul 12 Corn closed at USD5.68, up 16 1/2 cents; Dec 12 Corn closed at USD5.23 3/4, up 13 3/4 cents. Funds were said to have bought around 12,000 corn contracts on the day after weekend rains turned out to be lighter than anticipated. The 30-day rainfall totals for May show much of the Corn Belt having less than 50% of normal precipitation last month. Following sub-par field moisture in May the weather forecast going forward doesn't contain much in the way of precipitation either. Talk persists that China has bought up to 6 cargoes of US corn as prices dipped to 17-month lows last week, but there is no confirmation of this from the USDA as yet. Ukraine announced it's intention to sell 3 MMT of it's new crop corn to China in 2012/13 if it can get over a few quarantine hurdles, although that will be easier said than done. After the close the USDA said that 72% of the US 2012 corn crop is rated good/excellent, unchanged from last week. Emergence is 97% versus 83% normally.

Wheat: Jul 12 CBOT Wheat closed at USD6.27 3/4, up 15 1/2 cents; Jul 12 KCBT Wheat closed at USD6.55, up 18 cents; Jul 12 MGEX Wheat closed at USD7.42 1/2, up 3 cents. Short-covering was a feature. Wheat regained around half of Friday's losses, although talk circulates of Asian buyers potentially switching out of wheat and back into corn at current price differentials. Funds were said to have been net buyers of around 4,000 Chicago wheat contracts on the day after weekend rains in Russia and China were below expectations. Weekly export inspections of 21.6 million bushels were bang in line with trade expectations. The USDA peg the winter wheat harvest at 20% complete, more than double last week's pace and well ahead of just 3% normally. Harvesting is 73% done in Oklahoma compared to just 13% on average for this time. Winter wheat crop ratings fell from 54% good/excellent to 52%. Spring wheat good/excellent fell one point to 78%.

04/06/12 -- Paris grains finished mostly lower with the London market closed for a two day public holiday. Inactive Aug 12 Paris wheat was unchanged once again at EUR208.00/tonne, whilst Nov 12 was EUR2.25/tonne lower at EUR206.50/tonne. Corn was one wuro firmer to one euro lower, whilst rapeseed ended with losses of EUR5-6.00/tonne.

European markets were playing catch-up with a sharply lower US wheat close on Friday night, although the overnight electronic market did manage to reverse some of those losses today.

European concerns are never far away, with fabled billionaire investor George Soros warning that EU leaders only have a three-month window left to save the euro. The German economy will soon start to weaken under the burden of trying to keep the eurozone intact, he says, making it more difficult for Angela Merkel to sell the idea of increased financial responsibility to the German electorate and tax-payers.

Crude oil was under pressure again for most of the day, extending recent losses on fears over the health of the global economy.

Weekend rains in the US were lighter and less widespread than had been hoped, allowing grains there to rebound somewhat from last week's losses.

The Ukrainian Grain Association say that grain carryover stocks at the end of the 2011/12 marketing year could be as high as 12 MMT after the government there were slow to remove export restrictions earlier in the season. That should compensate for winter wheat losses and allow them to participate in a full export programme in 2012/13, led by corn.

Kazakhstan will have healthy grain carryover stocks of 5 MMT, according to the Minister of Agriculture, and that's only if they can manage to export 4.5 MMT in the last two months of the marketing year, which sounds rather ambitious in the current climate.

Kazakh spring grain plantings are 96% done, he added. Russian spring sowings are at around a similar stage of completion, whist Ukraine's are said to have already exceeded expectations.

Winter crop conditions in the latter are said to be 68% good/satisfactory, with winter wheat rated 71.4% good/satisfactory.

Rusagrotrans say that an optimistic assessment of the 2012 grain harvest potential in Russia places the total crop at around 93.4 MMT - only marginally down on last year. A "moderate" estimate would be 89.6 MMT and a pessimistic one 82 MMT. The middle ground figure would allow them to export 19 MMT of grains in 2012/13, they say.

Ukraine meanwhile says it is hoping to export 3 MMT of corn to China in the coming season, which would be a knock to US export hopes if they can allay the Chinese authorities fears on quality issues.

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
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The guy is clearly deranged and you should almost certainly ignore everything that he says.